JANE BRADLEY

A FIFTH of young people who do not currently own their own home believe it is “virtually impossible” for first-time buyers to get a mortgage, a report has claimed – yet their parents do not agree.

While a total of 21 per cent of 20 to 45-year-olds think they would struggle to get funding to buy their own home, despite the recent housing market and economic recovery, only 12 per cent of parents with adult children are of the same opinion.

The Generation Rent report from Halifax found that the need for young people to move back in with their parents appears to be a growing issue. In 2015, 28 per cent of parents of adult children aged between 20 and 45 said their children had moved back into the family home, compared with less than a quarter in 2012.

However, there is also a growing sense of optimism compared to previous years, the report suggests. When similar research was carried out in 2012, 29 per cent of prospective first-time buyers thought it was virtually impossible to get a mortgage, as did 21 per cent of parents of adult children. Looking at how parents have supported their adult children in buying a home, 26 per cent said they have contributed towards their child’s deposit, while 21 per cent had helped with moving costs.

Figures from the Office for National Statistics show that a quarter of all young people aged 20 to 34 in Scotland currently live with their parents. Many have returned to the family home after studying – or have never left – with many claiming that a difficult jobs market and rising property prices make it impossible to live independently.

Meanwhile, 57 per cent of parents who own a property reported to having contributed, or planning to contribute, towards their child’s deposit, compared with just 24 per cent of parents who rent.

The Scottish Government last month closed this year’s Help to Buy (Scotland) scheme, which assists buyers in purchasing a new-build home from a participating home builder without having to fund all of the purchase price. The scheme had allocated £100 million of funding from April this year – plus an extra £30m for the Small Developers scheme – a smaller amount than was available last year.

Craig McKinlay, mortgage director at Halifax, said: “The Generation Rent report shows a clear divide between parents and their children as regards optimism over getting on the housing ladder.

“In reality there are more mortgages available which require a 5 per cent deposit and first-time buyer numbers are increasing. But whether it is giving their children a cash lump sum or providing a roof over their heads while they save, it is clear the bank of mum and dad will have a role to play in helping their children get on the property ladder for the foreseeable future.”